California faces power shortages and price hikes amid drought woes: report

George Avalos, The Mercury News on

Published in Business News

California’s power squeeze could greatly worsen because less electricity from hydro plants could intensify the demand for electricity from plants that are fired by natural gas or sources that are in other states.

Other states might not be able to ride to California’s rescue, however. The drought has scorched neighboring states as well, which might mean they might have to cling to their own electricity supplies rather than export the power to an energy-hungry California.

Hydroelectricity is deemed to be cheaper and more flexible than other sources such as natural gas. This could force California into increased reliance on non-hydro sources or suppliers from outside of the Golden State. That, in turn, may trigger spikes in power costs. Put another way, non-hydro sources might be scarcer and more expensive.

“Our analysis showed that all summer electricity prices in California increase under a drought scenario,” the federal agency stated in its report.

To help alleviate the potential shortage of electricity, Gov. Gavin Newsom and PG&E are exploring ways to keep the vast Diablo Canyon nuclear power plant perched on a scenic stretch of the California coast in San Luis Obispo County operating beyond a scheduled shutdown date of 2025.


Hydroelectric plants might be able to provide only 8% of California’s electricity requirements this summer, about half of their typical share of 15%, the federal agency warned.

Peak prices for electricity could hop 7% higher this summer in Northern California, according to the report.

“The reduction in hydroelectric generation will alter the generation mix in California, resulting in an increase in wholesale power prices in the West and higher carbon emissions,” the federal agency reported.

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